YELLOWSTONE COUNTY — Yellowstone County property owners could see an increase on the second half of their property taxes due next May, even though the Montana Legislature recently passed two bills aimed at lowering those taxes, according to County Treasurer Hank Peters.
The increase stems from a timing issue that Yellowstone County officials are working to navigate. Several public schools in the district stand to lose hundreds of thousands of dollars if taxpayers don't cover the difference.
Learn how Yellowstone County officials are working to solve the issue:
"At this point, we don't know what we will have to do," said Don Christman, the superintendent for Lockwood Public Schools.
At the start of the school year, Christman and his assistant superintendent, Kelly Kinsey, were confident in the budget for Lockwood Public Schools. However, panic set in after the two received a letter from Yellowstone County Treasurer Hank Peters earlier this month.
"It's tight when you come in. You have your budget certified in August, you know what money you have and where it's going to go, and how that's budgeted out," Kinsey said.
That letter referenced a shortage the district will now be facing. Three school districts in Yellowstone County: Lockwood, Billings, and Laurel, are now seeing a decrease in taxable value. For Lockwood Public Schools, that would mean a decrease in the budget of almost 6 percent, or $477,000.
The issue stems from two recent legislative bills aimed at reducing historic property tax increases facing Montana homeowners, House Bill 231 and Senate Bill 542.
"The Montana Legislature passed House Bill 231 and Senate Bill 542 very late in the session, delivering property tax relief. But what it did was, it put the normal property tax process on a bit of a time crunch," said Peters.
According to Peters, because the two bills were passed so late in the session, it created timing problems. The Montana Department of Revenue had to send out assessment notices at the end of July, just days before budget certification values were due.
"Because the certification happened closer to when the assessment notices were sent out, then we hadn't had the initial adjustments that would normally happen," Peters said.
"With the new laws, there was not a communication system set up, so people weren't talking. It was not like anybody did anything inappropriate, there just wasn't communication with, 'We're going to reduce these taxes,' and then it all just hit at once," Christman said.
When school districts, such as Lockwood, developed their budgets in August, they planned to use that money throughout the school year.
"The school boards want to make sure that they get the revenue that they budgeted for," Peters said.
Instead, they are looking at a shortfall.
For relief, on Tuesday, Yellowstone County commissioners approved a resolution urging the Montana Department of Revenue to recertify property values and rebill taxes to property owners. This action by the county would not force the state to recertify, but if it did, taxpayers would likely be on the hook to make up the shortfall for school districts.
"We just wanted our citizens in Lockwood to know, and our taxpayers, that this was not something the district initiated," Christman said. "It makes me sad for the residents, because we were so excited that the tax bills had come down."
Peters is in the process of drafting a letter to the Department of Revenue to recertify. He said property owners should know more information, such as how much of an increase they could see on their property taxes, by the spring.
"Be on the look out for a new bill. Unfortunately, I don't have a time frame just yet," Peters said.
Under recertification, the Lockwood budget would be balanced going forward in 2026 and 2027. Christman said the issue caught him by surprise.
"I feel bad that this will be now spread over the citizens of Lockwood and their tax bills," Christman told MTN.
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